MPs approved the VAT increase

The state Duma in the third final reading adopted the law on the increase of VAT from 18% to 20%, to be broadcast on the official website of the lower house of Parliament.

According to the document, the increase will take effect from 1 January 2019 and will not affect socially important goods, utilities and public transport. For them to be saved preferential rate of ten percent.

Until 2025, will be extended the validity of the zero rate for passenger traffic in the Crimea and the far East.

“Business in coming here, to the State Duma, said: we understand that this is our contribution to the development of the country”, — said at the meeting, the head of the Committee on budget and taxes Andrey Makarov.

In addition, in the coming years the rate of contributions employers ‘ insurance contributions will be fixed at 30 percent. The previously anticipated increase of the contribution rate to the Pension Fund from 22% to 26% in 2021.

The Finance Ministry estimates, the tax increase could bring in the budget additional 633,5 billion annually.

The impending VAT increase, Prime Minister Dmitry Medvedev announced on June 14. Additional budget revenues necessary for the execution of the “may decree” of President Vladimir Putin. According to the Minister of Finance and first Deputy Prime Minister Anton Siluanov, funds will be spent on health, education, the digitization and infrastructure, and the introduction of preferences for business.